Mattioli Woods announces acquisition of Caledonia Asset Management

LONDON: Mattioli Woods plc announced the acquisition of 100% of the share capital of Caledonia Asset Management Limited from its shareholders for an initial consideration of £0.96 million.

A potential further consideration of up to £0.64 million is dependent on the attainment of specified performance targets in the two years after completion.

Founded in 2000, Caledonia provides wealth management services to affluent individuals and families, encompassing lifestyle financial planning, pensions and retirement planning, ISAs, life assurance, critical illness, income protection and personal tax planning.

Working with circa 150 private clients with over £55 million of assets under advice, Caledonia is based in Edinburgh and employs an experienced team of five staff, all of whom will remain with Mattioli Woods following completion.

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In the year ended 31 December 2020, Caledonia generated revenues of £0.45 million with a profit before taxation of £0.18 million. At 31 December 2020, Caledonia’s gross assets were £0.27 million and net assets were £0.19 million. The acquisition is expected to be earnings enhancing in the first full year of ownership.

The total consideration comprises:

· An initial consideration of £0.96 million on a cash-free, debt-free basis (subject to adjustment for the value of net assets acquired) compromising £0.86 million in cash plus 14,442 new ordinary shares of 1p each in Mattioli Woods (“the Consideration Shares”), which are valued at £0.1 million based on the average closing price of a Mattioli Woods share for the 10 days to 15 April 2021 inclusive, of 692.5 pence; and

· Contingent consideration of up to £0.64 million payable in cash on the first and second anniversaries of completion, subject to certain profit targets being met.

Payment of the initial cash consideration, deal costs and estimated net asset completion adjustment has resulted in a net cash outflow at completion of £0.75 million (net of estimated cash received on acquisition) .

Application has been made to AIM for the admission of the Consideration Shares to trading. Admission of the Consideration Shares, which will rank parri passu in all respects with Mattioli Woods’ existing shares in issue, is expected to become effective on 22 April 2021.

Following the issue of the Consideration Shares, the total number of ordinary shares of 1p each in the Company with voting rights will be 28,235,055. Mattioli Woods does not hold any Ordinary Shares in Treasury.

The figure of 28,235,055 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

The Sellers have entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of the Consideration Shares during the two years following completion.

Commenting on the acquisition, Ian Mattioli, Chief Executive Officer of Mattioli Woods, said: “We are delighted to welcome Gordon, Pauline and their experienced team as part of Mattioli Woods. Caledonia is a great fit for us both culturally and operationally, serving a similar client base to that of our existing business. This is an important strategic step for the Group, extending the geographic footprint of our wealth management business in Edinburgh.”

Gordon Forbes and Pauline Forbes, Caledonia’s Directors, added: “This is a very positive step for everyone associated with Caledonia, especially our clients and employees. Mattioli Woods shares our core values and client centred business ethos and so we are delighted to become part of the Mattioli Woods Group.

“Combining our strengths will allow Caledonia’s clients and employees to benefit from the considerable additional resources and support available as part of the Group, enabling our team to enhance and expand the bespoke personal service our clients expect from us. We are very much looking forward to this exciting new phase”.

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